Loans On Bottomry and Respondentia

 

. LOANS ON BOTTOMRY AND RESPONDENTIA LOAN ON BOTTOMRY, DEFINED

It is a contract in the nature of a mortgage, by which the owner of the ship borrows moneyfor the use, equipment and repair of the vessel for a definite term, and  pledges the ship as asecurity asecurity for its repayment, with maritime or extraordinary interest on account of themaritime risks to be borne  by the lender, it being stipulated stipulated

 

that if the ship be lost in thecourse of the specific voyage or during the limited time, by any of the  perils enumerated inthe inthe contract, the lender shall also lose his money. LOAN ON RESPONDENTIA, DEFINED

It is a contract made on the goods laden on board the hsip, and which are to be sold or exchanged in the course of the voyage, the borrower’s personal respo

 

nsibility being deemedthe  principal security security for the  performance of the contract. contract. The lender must be paid hisprincipal and interest, though the ship  perishes, provided that the the goods are saved. CHARACTER OF LOAN, ART. 719 ARTICLE 719

A loan on bottomry or respondentia shall be considered that which the repayment of thesum loaned and the premium

 

stipulated, under any condition whatsoever, depends on thesafe arrival in port of the goods on which it is made, or of their value in case of accident.

FORMS AND REQUISITES ARTICLE 720

Loans on bottomry or respondentia may be executed: 1. By means of a public instrument.

 

  2. By means of a bond signed by the contracting parties and the  broker who took parttherein.3. parttherein.3. By means of a private instrument. Under whichever of these forms the contract is executed, it shall  be entered in the certificateof certificateof the registry of the vessel and shall be recorded in the commercial registry, without whichrequisites the credits originating from the same shall not have, with regard to other credits,the preference which, according to their nature,

 

they should have, although the obligationshall be valid between the contracting parties. The contracts made during a voyage shall be governed by the  provisions of Articles Articles 583 and611, and shall be effective with regard to third persons from the date of their execution, if they should be recorded commercial registryinofthe the port of registry of the vessel beforeeight days have elapsed from the date of her arrival. If said eight days should elapse withoutthe record

 

having been made in the commercial registry, the contracts made during thevoyage of a vessel shall not have any effect with regard to third persons, except from the dayand date of their entry. In order that the bonds of the contracts celebrated in accordancewith No. 2 may have legal force, they must conform to the registry of the broker who tookpart therein. In those celebrated in accordance with No. 3 the acknowledgment of thesignature must precede. Contracts which are not reduced

 

to writing shall not be the basis fora judicial action. ARTICLE 721

In a bottomry or respondentia  bond there must be stated: stated: 1. The kind, name, and registry of the vessel.

2. The name, surname, and domicile of the captain.

 

3. The names, surnames, and domicile of the person giving and of the person receiving theloan. 4. The amount of the loan and the  premium stipulated. 5. The time for repayment. 6. The goods pledged to secure repayment. 7. The voyage for which the risk is run.

 

ARTICLE 722

The bonds may be issued to order, in which case they shall be transferable by indorsement,and the assignee shall acquire all the rights and run all the risks corresponding to theindorser. AMOUNT ARTICLE 723

Loans made be made in goods and in merchandise, fixing their

 

value in order to determinethe  principal of the loan.

ARTICLE 726

If the lender should prove that he loaned a larger amount than the value of the article liablefor the  bottomry loan, by reason of fraudulent measures employed the borrower the loanshall only by be valid for the amount at which said object is appraised by experts. The surplusprincipal shall be returned with legal interest for the

 

whole period of the duration of thedisbursement. ARTICLE 727

If the full amount of the loan contracted to load the vessel should not be made use of for thecargo, the surplus shall be returned before clearing. The same procedure shall be observedwith regard to the goods taken as a loan if they could not all have been loaded. ARTICLE 728

 

  The loan which the captain takes at the point of residence of the owners of the vessel shallonly affect that part of the latter which  belongs to the captain, captain, if the other owners or theiragents should not have given their express authorization thereto or should not have takenpart in the transaction. If one or more oftothe owners should be requested furnish theamount necessary to repair or provision the vessel, and should not do so within twentyfourhours, the interest which the

 

 parties in default default may have in the vessel shall be liable for theloan in the proper proportion. Outside of the residence of the owners the captain maycontract loans in accordance with the provisions of Articles 583 and 611. BY WHOM ARTICLE 611

In order to comply with the obligations mentioned in the foregoing article, the captain, whenhe has no funds and does not

 

expect to receive any from the agent, shall procure the same inthe successive order stated  below:

1. By requesting said funds of the consignees or correspondents of a vessel.

2. By applying to the consignees of the cargo or to the persons interested therein.